Bangalore-based "UTL has put in a Rs 998 crore price bid, which is nearly 9% less than the Rs 1092 crore original estimated cost of procuring GPON systems for a pan-India rollout," a BBNL board member told ET.

The top executive quoted above said ITI with Rs 1877.45 crore, Tejas Networks with Rs 1886 crore and Sterlite with Rs 2248 crore had emerged the second (L2), third (L3) and fourth (L4) bidders respectively after price bids were opened Tuesday evening. BBNL will place initial purchase orders next month after final discussions in its next board meeting scheduled on February 27.

The GPON systems tender was the most critical piece of the government's ambitious national broadband venture as these devices will carry voice, data and video signals over the proposed fibre-optic broadband network at super speeds.

The project, popularly known as national optic fibre network (NOFN), will use GPON fibre technology to take high-speed Internet to the hinterlands to spur India's broadband penetration. Another BBNL official said "L&T, ZTE India and Bharat Electronics had put in higher bids, emerging as L5, L6 and L7 bidders respectively".

Seven telecom gear makers participated in the GPON tender after BBNL invited bids last September. Under the tender terms, UTL as lowest bidder will meet 40% of BBNL's GPON systems requirement. But in the event ITI, Tejas and Sterlite do not match the L1 price bid, BBNL can turn to UTL to meet its balance requirement. "UTL has been adjudged the commercial winner in the GPON tender by BBNL. We will immediately meet 40% of the GPON systems requirement," said Debasish Choudhury, VP (telecom) at United Telecom.

Tejas, ITI and Sterlite did not comment on whether they would match UTL's price bid. Interestingly, the top four bidders are all Indian telecom product companies. Preferential market access (PMA) rules will apply in case of mega government telecom projects like NOFN, calling for mandatory local sourcing of 24 telecom products classified as security sensitive.